Exploring the Dynamics of Human Capital and Economic Growth in Central Asian Countries: An Empirical Analysis Using Panel Data

Abstract

This study examines the relationship between human capital and economic growth in five Central Asian countries: Uzbekistan, Kazakhstan, Turkmenistan, Kyrgyzstan and Tajikistan. We have selected the period from 2000 to 2023 for our analysis. This study evaluates the impact of various components of human capital—namely education, health expenditure, life expectancy, child mortality and labour productivity—on gross domestic product growth, employing panel data regression models based on data from the World Bank’s World Development Indicators. The empirical examination employed pooled ordinary least squares, fixed-effects (FE) and random-effects models, with the final model selected via the Hausman test, which indicated that the FE model was the most appropriate fit. We conducted several diagnostic tests to assess the model’s reliability; the modified Wald test indicated heteroscedasticity, whereas the Wooldridge test confirmed the absence of autocorrelation in the panel data. Furthermore, the absence of multicollinearity among the variables was validated through the variance inflation factor test. Based on these findings, we recommend that regional policymakers prioritize human capital development, allocate resources effectively and formulate economic policies grounded in institutional reforms.